Laurans Mendelson
HEICOAbout Laurans Mendelson
Laurans A. Mendelson is Chairman and CEO of HEICO, serving as CEO since February 1990, Chairman since December 1990, and previously President from 1991–2009; he is 86 and has been a director since 1989, with an early career as a licensed CPA in FL and NY (inactive) . Under his leadership, HEICO delivered FY2024 net sales of $3.858B (+30% YoY), net income of $514.1M (+27%), operating income of $824.5M (+32%), and maintained 21.4% operating margin . Long-run value creation includes a $100,000 investment at the time current management took over becoming ~$99.2M by Oct 31, 2024 (≈22% CAGR), alongside net sales CAGR ~16% and net income CAGR ~18% since 1990 . FY2024 EBITDA was $1,002.23M, with the company emphasizing EBITDA, net income, and cash flow as key performance linkages in pay decisions .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| HEICO Corporation | Chief Executive Officer | 1990–present | Oversaw multi-decade compounding in sales, net income, and TSR via organic growth, acquisitions, and decentralized operating culture |
| HEICO Corporation | Chairman of the Board | 1990–present | Unified leadership (combined CEO/Chair) guiding strategy, capital allocation, and governance tone |
| HEICO Corporation | President | 1991–2009 | Led operational execution during early expansion phase |
| CPA (Florida & New York; inactive) | Certified Public Accountant | Early career | Financial and audit expertise underpinning capital discipline |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Mount Sinai Medical Center (Miami Beach) | Former Chairman; current Board of Trustees member, Executive Committee member, Society of Founders | Ongoing | Governance and healthcare insights; extensive committee leadership experience |
| Columbia University | Trustee Emeritus; former Trustee and Chair of Trustees’ Audit Committee | Ongoing | Audit and governance expertise |
| Honors | Chevalier of France’s Légion d’honneur; industry awards (Living Legends of Aviation, Aero Club of Southern California, Greater Miami Aviation Association) | Various | Industry recognition and network credibility |
Fixed Compensation
Executive compensation (Laurans A. Mendelson)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 1,267,940 | 1,330,255 | 1,389,200 |
| Director Fees ($) | 245,382 | 258,200 | 275,000 |
| Insurance Benefits ($) | 29,896 | 32,210 | 35,043 |
| Company Contributions to HEICO Savings & Investment Plan ($) | 14,950 | 16,000 | 16,950 |
| Use of Company Car ($) | 3,603 | 9,324 | 3,893 |
| Other Perquisites & Personal Benefits ($) | — | — | — |
| All Other Compensation ($) | 2,831,820 | 2,855,584 | 2,872,562 |
| Total Compensation ($) | 9,107,291 | 15,447,501 | 10,382,143 |
Notes: Perquisites include life insurance, automobile allowances, and personal aircraft time-sharing agreements where executives prepay incremental flight costs; no incremental company cost is included in SCT for such usage . Director compensation schedule for all non-employee directors: annual retainer $250,000, mandatory stock purchase ≈58% of retainer, committee membership $15,000 per committee, chair fee $10,000; site visit $1,200 .
Performance Compensation
Annual Incentive Framework and FY2024 Outcomes
| Metric | Weighting | Target ($) | Actual ($) | % of Target | Vesting/Payout |
|---|---|---|---|---|---|
| Net Income attributable to HEICO | 40% | 470,677,000 | 514,109,000 | 109.2% | Cash payout per plan (non-equity) |
| EBITDA | 30% | 834,141,000 | 1,002,230,000 | 120.2% | Cash payout per plan (non-equity) |
| Cash Flow from Operations | 30% | 493,610,000 | 672,370,000 | 125.0% | Cash payout per plan (non-equity) |
Payout mechanics: Target roughly 200% of eligible compensation at 10% growth across metrics; scaling down 10% for each percent below target and scaling up ~2% for each percent above target; capped at 300% for Lead NEOs . Laurans A. Mendelson earned $5,264,381 under the plan plus an additional $856,000 fixed cash incentive triggered by ≥5% net income growth (actual ~27% YoY), totaling $6,120,381 for FY2024 .
Equity Awards and Vesting
- No options granted to NEOs in FY2024 following shareholder feedback; committee intends to resume performance-based options in FY2025 .
- Vesting schedule for options: 20% per year over 5 years .
Outstanding equity awards (Laurans A. Mendelson, as of Oct 31, 2024)
| Share Class | Grant Date | Exercisable | Unexercisable | Exercise Price ($) | Expiration |
|---|---|---|---|---|---|
| Common (C) | 3/15/2019 | 60,000 | — | 91.13 | 3/15/2029 |
| Common (C) | 3/17/2023 | 10,000 | 40,000 | 163.35 | 3/17/2033 |
| Common (C) | 6/9/2023 | 10,000 | 40,000 | 163.61 | 6/9/2033 |
Option exercises: None by Laurans in FY2024 or FY2023, indicating limited immediate selling pressure from options .
Equity Ownership & Alignment
| Category | Common Stock | Class A Common | Notes |
|---|---|---|---|
| Shares Beneficially Owned | 4,103,263 (7.45% of Common outstanding) | 210,447 (<1%) | Includes 90,000 options exercisable within 60 days |
| Options (Exercisable within 60 days) | 90,000 | — | Included in beneficial ownership per SEC rules |
| Ownership Culture | Board and management maintain high inside ownership; no formal exec ownership guidelines (directors must purchase HEICO shares ≈58% of retainer) |
Policies:
- Insider trading policy; no formal hedging policy but named executive officers have never hedged HEICO shares .
- Pledging: no specific disclosure found; not stated in proxy .
Employment Terms
| Item | Status/Terms |
|---|---|
| Employment agreement | No employment agreements with named executive officers |
| Severance/Change-in-control (LCP) | Lump-sum LCP obligation to Laurans: $60,884,183 upon change in control or termination, as of Oct 31, 2024 |
| Equity acceleration | Unvested options accelerate upon change in control, liquidation/dissolution, or certain reorganizations unless assumed/substituted; Laurans’ acceleration value: $6,517,600 (as of Oct 31, 2024) |
| Clawback | Executive compensation clawback policy adopted Sept 2023 for accounting restatements |
| Perquisites | Automobile allowance/car use; life insurance; personal aircraft time-sharing with executives prepaying incremental costs |
Non-qualified deferred compensation (LCP, FY2024)
| Metric | Amount ($) |
|---|---|
| Executive contributions (Laurans) | 83,352 |
| Registrant contributions (Laurans) | 2,541,676 (incl. $2.5M discretionary + $41,676 match) |
| Aggregate earnings (Laurans) | 16,069,829 |
| Aggregate balance at FY-end (Laurans) | 60,884,183 |
Board Governance
- Role: Combined Chairman and CEO; independent committees chaired by outside directors; independent director executive sessions at least annually with option on every agenda; rotating presiding lead independent director among committee chairs .
- Independence: 70% of the Board independent; Laurans classified as “inside” director .
- Committee memberships: Laurans chairs the Executive Committee; not listed on Compensation, Audit, Nominating, ESH, or Stock Option Plan committees .
- Attendance: 100% Board and committee meeting attendance in FY2024 .
- Director compensation structure and share purchase requirement detailed above .
Compensation Committee Analysis, Peer Group, and Say-on-Pay
- Pay philosophy: Focus on simple, transparent incentives tied to Net Income, EBITDA, and Cash Flow; discretion based on long-term performance and culture .
- Shareholder feedback: Say-on-pay approval was ~66% in 2024, leading the committee to refrain from FY2024 option grants and commit to performance-based options and performance-based supplemental LCP awards going forward; enhanced bonus disclosure adopted .
- Prior approval: ~92% say-on-pay approval in 2023 .
- Compensation benchmarking peer group (FY2024 analysis via FW Cook): AMETEK, CAE, Crane Company, Curtiss-Wright, Dover, Hexcel, Howmet Aerospace, Moog, RBC Bearings, Teledyne Technologies, Textron, TransDigm, Woodward .
Performance & Track Record
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Net Income Attributable to HEICO ($M) | 304.22 | 351.68 | 403.60 | 514.11 |
| EBITDA ($M) | 487.36 | 593.74 | 758.31 | 1,002.23 |
| HEI Common Stock TSR (initial $100 Oct 31, 2020 base) | 132.86 | 155.22 | 151.36 | 234.29 |
Additional long-run value: A $100,000 investment since management took over became ~$99.2M by Oct 31, 2024 (≈22% CAGR) .
Related Party Transactions and Risk Indicators
- FY2023 related party items disclosed involve Eric and Victor Mendelson’s family members; no specific transaction disclosed for Laurans in that section .
- Section 16(a) compliance: One untimely Form 4 filing for Laurans reported Oct 19, 2023 .
- Repricing/golden parachutes: Company states it does not reprice options without shareholder approval and does not have golden parachutes .
- Anti-hedging: No formal policy; named executive officers have never hedged HEICO shares .
Director Compensation (Board-wide framework)
| Component | Details |
|---|---|
| Annual retainer | $250,000; mandatory stock purchase ≈58% ($145,000) |
| Committee membership | $15,000 per committee; chair fee $10,000 |
| Meeting/site visits | $1,200 per site visit |
| Non-employee director options | None granted in FY2024; only Dr. Schriesheim held legacy options |
Investment Implications
- Alignment: High inside ownership and large LCP balances create strong retention/long-term alignment but imply substantial cash obligations under change-of-control; Laurans’ LCP balance ($60.9M) and option acceleration value ($6.5M) are material potential outflows in a transaction scenario .
- Incentive quality: FY2024 cash bonus tightly linked to Net Income, EBITDA, and Cash Flow; the committee’s pivot to performance-based options and LCP awards addresses prior shareholder concerns (2024 say-on-pay 66%), improving pay-for-performance optics .
- Trading signals: No option exercises by Laurans in FY2023–FY2024 reduces near-term selling pressure; anti-hedging culture and insider ownership are supportive, though combined Chair/CEO role and family governance ties warrant continued monitoring of independence risks .
- Execution risk: Multi-decade track record of EBITDA and cash flow compounding, with FY2024 performance well above bonus targets, suggests strong operator discipline; ongoing acquisition integration (e.g., Wencor, Exxelia) remains a lever and a risk vector .